KATHERINE V. DRESDNER v. CLAIRE C. MEEHAN, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4787-03T14787-03T1 A-6274-03T1

KATHERINE V. DRESDNER,

Plaintiff-Appellant,

vs.

CLAIRE C. MEEHAN, ROBERT

MEEHAN, and ANN C. MEEHAN,

Defendants,

and

DAIMLERCHRYSLER (f/k/a THE

CHRYSLER MOTOR COMPANY),

Defendant-Respondent.

__________________________________

 

Argued: January 30, 2006 - Decided April 11, 2006

Before Judges Cuff, Lintner and Gilroy.

On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-2556-00.

James J. Pettit argued the cause for appellant (Locks Law Firm, attorneys; Mr. Pettit and Christine Klimczuk, on the brief).

Richard J. Mirra argued the cause for respondent (Hanlon, Boglioli & Hanlon, attorneys; Mr. Mirra, on the brief).

PER CURIAM

This products liability and consumer fraud case emanates from an automobile accident. Plaintiff Katherine V. Dresdner was rear-ended by an automobile driven by defendant Claire C. Meehan. Plaintiff suffered a second impact when the seat back in her Plymouth Voyager minivan broke and her head struck the roof of the car. She settled with the driver of the other car, received a favorable verdict on her products liability design defect claim, but appeals from the dismissal of her consumer fraud claim (A-4787-03T1) and from the disposition of various post-trial orders (A-6274-03T1). We consolidate these appeals, originally calendared back-to-back, for the purpose of this opinion and affirm.

On March 29, 1999, plaintiff was driving a 1997 Plymouth Voyager minivan. She was wearing her seat belt. While stopped, defendant Meehan struck plaintiff's vehicle in the rear. Plaintiff's seat back collapsed causing several injuries, including a closed head injury with cognitive impairment due to concussion. The parties stipulated that: Meehan's vehicle was traveling at twenty-five to thirty miles per hour at impact; the impact imparted a "Delta V" force to plaintiff's vehicle of fifteen miles per hour, meaning that it caused the vehicle to suddenly move forward at that speed; the average force on plaintiff herself during the duration of the accident was seven to eight Gs; and the peak load on plaintiff was ten Gs.

On appeal, plaintiff argues that the trial judge should not have dismissed the consumer fraud claim founded on knowing omissions by defendant DaimlerChrysler (Chrysler), that the trial judge erroneously barred certain evidence, and that the trial judge erred in calculating remittitur of the award for future medical expenses, in suspending prejudgment interest for a short period when her complaint was dismissed for discovery violations, and by denying prejudgment interest on the award for future economic loss. What is not before this court is whether a consumer fraud claim and a products liability claim are mutually exclusive generally or in the particular circumstances of this case where plaintiff received a jury award on a theory of product defect and she sought recovery on a consumer fraud claim founded on knowing omission of information.

We address the evidential issues first because plaintiff sought to admit many of the excluded items to support her claim that Chrysler knowingly failed to inform consumers of the danger posed by its seat backs.

On February 16, 1992, the television newsmagazine "60 Minutes" broadcasted a segment entitled "Car Seats." It referenced a Mitsubishi vehicle sold by Chrysler; it did not mention any vehicles designed by Chrysler. Plaintiff sought to admit this segment and play it for the jury. She also sought to admit deposition testimony of Paul Sheridan, a member of Chrysler's NS-Body Minivan Complexity Team, to advise the jury that members of the team viewed the segment and to describe Chrysler's reaction to the piece. Sheridan would have also testified that in February or March 1992 he urged Chrysler at a Safety Leadership Team meeting to seize the opportunity to establish safety leadership by improving minivan seat backs. According to plaintiff, this evidence demonstrated that Chrysler had notice of the seat back's inadequate performance in rear impacts and that the defect caused injuries. Plaintiff urged that the evidence was not prejudicial and that Chrysler had ample opportunity in other forums in other litigated matters for cross-examination on the same adverse assertions and representations related in the segment.

The trial judge ruled that the "60 Minutes" seat back segment was inadmissible because it was highly prejudicial, proved none of the elements of the case, and the jury would likely consider it for the truth of the matter in spite of a limiting instruction that it was available for the jury's consideration only on the issue of notice. The trial judge ruled that excerpts from depositions of Sheridan taken in other matters were inadmissible because he had not been listed as a witness and defendant should not be required to confront testimony through a deposition which it cannot subject to cross-examination.

Relevant evidence is "evidence having a tendency in reason to prove or disprove" a material fact, N.J.R.E. 401, and it is usually admissible unless some exception applies. N.J.R.E. 402. However, relevant evidence may also be excluded if "its probative value is substantially outweighed" by risks that include undue prejudice, confusion of the issues, and waste of time. N.J.R.E. 403; Green v. N.J. Mfrs. Ins. Co., 160 N.J. 480, 492 (1999). The trial court's determination of whether evidence is relevant is discretionary. Wymbs v. Twp. of Wayne, 163 N.J. 523, 534 (2000); Green, supra, 160 N.J. at 492. The decision to exclude relevant evidence is similarly within the trial court's "broad discretion," and it is reversible only if the court "'palpably abused its discretion'" by making a finding "'so wide off the mark that a manifest denial of justice resulted.'" Green, supra, 160 N.J. at 492 (quoting State v. Carter, 91 N.J. 86, 106 (1982)).

The trial court also has the discretion to admit evidence of "substantially similar" prior accidents as circumstantial proof "that a condition or a product is dangerous" and required a warning. Wymbs, supra, 163 N.J. at 534-35. Decisions to admit such evidence are to be made on a case-by-case basis, although the test of substantial similarity is "more stringent" when such evidence is offered to establish the particular dangerous condition that the plaintiff faced than when offered only to prove that the defendant had notice of some potential for unreasonable danger. Id. at 535-37.

In Suanez v. Egeland, 330 N.J. Super. 190, 195 (App. Div. 2000), this court ruled that the video reconstruction of the accident in question should have been excluded because its depiction in "extreme slow motion" was not representative of the actual accident. Like all video reconstructions, it had the capacity to influence the jury as "an apparently scientific demonstration," which made it too prejudicial even if it were offered for some limited purpose, such as explaining how the plaintiff's expert witness arrived at his opinions. Ibid. In Persley v. New Jersey Transit Bus Operations, 357 N.J. Super. 1 (App. Div.), certif. denied, 177 N.J. 490 (2003), we noted that "the danger of undue prejudice as a result of the jury's placing inordinate weight on a motion picture is always present due to the tremendous dramatic impact of motion pictures," as well as the tendency of a motion picture to reinforce "the testimony of the expert who oversaw its production." Id. at 14-15, 17-18 (court nonetheless upheld admission of a video that nearly duplicated the accident, contained no extraneous information, and whose creator was subject to cross-examination on its production).

As to the consumer fraud claim, plaintiff asserted that the segment served as notice of the defect, about which Chrysler did not inform consumers. The segment, however, featured a car of a different design and crashes that were not substantially similar to the circumstances of the crash in which plaintiff was involved. The segment, therefore, was not relevant evidence and also had the great capacity to be unduly prejudicial to Chrysler.

Plaintiff also sought to introduce evidence that the defective front seat backs in Chrysler's minivans posed risks to children seated behind the driver. She argues that the evidence is material to a consumer's decisions about which vehicle it will purchase and illustrates that Chrysler knowingly omitted to impart this information to consumers. The trial judge found the evidence was irrelevant and we agree. The case before the jury did not involve injury to a back seat passenger. The information was irrelevant to the case and presented the risk of introduction of tangential issues.

Plaintiff also argues that the trial judge erred by excluding evidence of other incidents of seat back failure similar to hers. She contends that the evidence would have established Chrysler's notice of inadequate performance of the minivan seat backs in rear-end collisions and that the admissibility of similar events should have been determined on a case-by-case basis.

The trial judge barred the evidence, reasoning that there was no indication that the vehicles in those accidents had seats of the same design because the information offered by plaintiff was "very generic, anecdotal," and conclusory. We agree with this analysis. Moreover, the evidence would have been relevant only to the issue of Chrysler's knowledge that the seat back was defective. It does nothing to advance plaintiff's consumer fraud claim that Chrysler knowingly omitted to disclose the defect to consumers. We now turn to the decision to dismiss the consumer fraud claim.

The trial judge denied Chrysler's pretrial motion to dismiss the consumer fraud claim but granted its renewed motion to dismiss at the close of plaintiff's case. Judge Koenig concluded that the record lacked legally sufficient evidence of proximate cause to support the consumer fraud claim. He found that the simple fact that Chrysler sought to sell minivans at a profit was the closest plaintiff had come to showing a knowing omission about the adequacy of the minivan seats with an intent to induce reliance. Judge Koenig also found that Chrysler lacked the degree of intent required for a consumer fraud claim based on a knowing omission. He reasoned that the differing results from various crash tests were insufficient evidence for a finding that defendant's failure to provide any information about the seat was a misrepresentation. Consideration of this point requires a review of the evidence adduced by defendant in support of this claim.

Plaintiff called two witnesses at trial: Alan Cantor and Joseph Burton. Cantor, an engineer, specialized in "the issue of crash survival." He testified as plaintiff's expert in seat design, restraint systems, occupant protection, human tolerance for sustaining force loads without injury, and "standards relating to occupant protection."

Cantor discussed the circumstances of plaintiff's accident, which caused her stationary vehicle to suddenly move forward at fifteen miles per hour, and caused her to be "thrown back into the seat." He opined that the crash forces in plaintiff's accident were within the range over which a "properly designed restraint system" could afford full protection, and that the restraint system in plaintiff's vehicle comprising the "front seat and seatbelt assembly" was defective. He further opined that the defect was a cause of plaintiff's injuries. He believed that plaintiff's seat back had collapsed, and explained that even if it had not, but rather was able to bounce back into position after bending by the sixty to sixty-five degrees that he observed, it would have made no difference, because at that position the seat back was too low to prevent plaintiff from ramping.

From photos of plaintiff's vehicle taken after the accident, Cantor estimated that the driver's seat back had bent backwards to sixty-five or seventy degrees, which was nearly fifty degrees beyond the normal seat back angle of eighteen to twenty-four degrees. He agreed that no part of the driver's seat had fractured.

Cantor declared that rear impacts at twenty-five to thirty miles per hour were "a very common type of accident" and thus foreseeable to car manufacturers. He acknowledged that the standard for seat back strength in numerous other countries, including Canada, Germany, and Japan, was the same as in this country, namely, the ability to resist a static force of 3300 inch-pounds, as in the original version of Standard 207, or the modestly higher requirement of resisting a static force of 4694 inch-pounds. He described Federal Motor Vehicle Safety Standard 207 (Standard 207), 49 C.F.R. 571.207 (1971), as not being a crashworthiness standard, which would have required a realistic crash simulation, but rather a measure that "lawn chairs" could satisfy. He tested the seats in plaintiff's vehicle and found that they withstood a force of only 8829 inch-pounds before they bent back to sixty degrees, without breaking.

Cantor described how a seat and restraint system can keep occupants in place so that they are better able to withstand the remainder of the impact forces beyond what the vehicle structure and components can absorb. He opined that the performance of the driver seat in plaintiff's minivan showed that it was too weak to protect occupants in rear impacts, and that the risk of injury from such performance outweighed what he saw as the dubious possibility that controlled seat deformation would reduce the risk of whiplash. In addition, Cantor regarded Chrysler's own dynamic tests of seat strength in rear impacts as unrealistic because they used dummies with legs fixed in the seated position.

Cantor described a video of a crash test conducted at Chrysler's request by an independent testing laboratory under Federal Motor Vehicle Safety Standard 301, 49 C.F.R. 571.301, which addresses only fuel tank integrity. He noted that ramping may have occurred, but that the lack of a camera inside the test vehicle made it impossible to know. Cantor also described an alternative seat that he devised, and narrated a video of a test of his alternative seat installed on a Dodge Neon platform.

Joseph Burton, a doctor who specialized in forensic pathology and forensic medicine, was plaintiff's expert in biomechanics and occupant kinematics. He explained that the G forces on an occupant from an impact depend on what interior surface he or she hits and how non-yielding it is. Burton believed that the seats in most vehicles did a good job of limiting injuries in such accidents, without referencing Chrysler minivans or any other particular model. Burton agreed that a rigid seat would pose the risk of failing to restrain an occupant who was not properly seated, and that the pertinent design question was the degree to which seat backs should yield in a rear impact.

Burton opined that the collapse of plaintiff's seat back during the accident caused plaintiff to suffer a "mild traumatic brain injury" that included cognitive deficits, plus a jaw injury. He believed that plaintiff hit her head on the rear seat rather than on the seat she was occupying, although he acknowledged that the radiographic studies of plaintiff showed no brain injury. He also acknowledged that plaintiff ramped up the seat back by approximately two to eight inches, which would not have been far enough for her head to reach the rear seat.

Notably, Cantor's and Burton's testimony was relevant only to the design defect claim. They provided no direct evidence that Chrysler knew of the defect and knowingly omitted providing this information to consumers.

The record also contained evidence of federal standards and a study commissioned by the federal agency that develops safety standards and the owner's manual. The standards in the federal regulation on seat back safety and performance applicable to plaintiff's vehicle, known as Standard 207, were promulgated in 1971. Standard 207 required seat backs in passenger vehicles to withstand a force of "20 times the mass of the seat in kilograms multiplied by 9.8 applied in a rearward longitudinal direction." 49 C.F.R. 571.207, S.4.2(b) (2006). When a seat back was in its rearmost position, it had to resist a force applied in a rearward direction to the upper seat back that was sufficient to create a load of 3300 inch-pounds at the "seating reference point," meaning at the same height as "the pivot center of the [occupant's] torso and thigh." 49 C.F.R. 571.3(b) (2006); 49 C.F.R. 571.207, S.4.2(b). Standard 207 represented tests of static strength rather than of dynamic strength, which crash tests are designed to measure.

In June 1974, Chrysler sent comments to the National Highway Traffic Safety Administration (NHTSA) in opposition to a proposed test for seat assemblies involving a rear barrier impact at thirty miles per hour. Chrysler's assessment of reports on rear-end accidents for which information about seat performance was available was that "the frequency of injury does not appear to be directly related to the amount of seat back deflection."

In January 1991, Chrysler began simulating rear impacts "to study the energy management capabilities of current production seats from both Chrysler and its competitors" in order "to develop Chrysler seats which can provide a reasonable level of performance in rear impacts" and prepare for proposed regulations. The evaluation criteria were that seat backs "deflect in a controlled manner in order to reduce the likelihood of occupant injuries" without releasing or collapsing, and that the test dummies "remain on the seat during the test. . . ." The criteria reflected "concerns" [about] occupants being ejected from the vehicle or into the rear passenger compartment," and the "commonly held belief throughout the industry that the seat should deflect in a controlled manner in order to reduce the likelihood of occupant injuries."

A December 11, 1992, internal Chrysler memorandum, possibly written by Alan Cantor, who testified for plaintiff on the issue of design defect, stated that "[t]here is no definitive agreement within the industry or among researchers regarding how front seat systems should react during rear impacts to reduce the probability of occupant injury (rigid vs. controlled energy dissipation)." At some point in 1992, the National Highway Traffic Safety Administration (NHTSA) issued a study of seat back performance in actual rear-impact accidents. It found that the attempt to correlate degrees of injury with crash severity yielded unclear results, and concluded that there was no consistent pattern of increased likelihood of injury for occupants of seats that were damaged in such accidents. The record also contains part of an undated and untitled report that Chrysler produced in discovery, which advocated reliance on strong seat backs rather than more yielding seat backs due to the unpredictable performance in various types of collisions exhibited by these seat backs.

As of March 1996, NHTSA changed one requirement in Standard 207. It mandated that seat backs withstand a force of "20 times the mass of the seat in kilograms multiplied by 9.8 applied in a rearward longitudinal direction." 49 C.F.R. 571.207, S.4.2(b) (1996). Assuming that the prior force of "20 times the weight of the seat" was measured in pounds, the new force was more than four times as great. The other requirement, resistance to a rearward force applied to the upper seat back that resulted in a force of 3300 inch-pounds at the seating reference point, was not changed except to restate the force of 3300 inch-pounds as its metric equivalent, namely, 373 newton meters. 49 C.F.R. 571.207, S.4.2(d).

The record also contains evidence of a 1996 study by the University of Virginia. The study, issued on March 18, 1996, was on simulated rear impacts that NHTSA had commissioned in response to a petition to increase the requirements of Standard 207. The goal of the petition was reduction of ramping. The study reported that General Motors, Ford, Chrysler, and several foreign manufacturers took different positions on the need for increasing the standard or for changing from static to dynamic testing; Chrysler emphasized the need for further research, with "the rear-impact case to be of primary importance." The study agreed with the objection of some manufacturers that a particular model of dummy was unsuitable for testing seat back performance in rear impacts, and accordingly the study used others, including one whose hip joint was not fixed in the seated position.

The study simulated the impact of a moving vehicle into the rear of a stationary one at a "closing speed" of thirty miles per hour. It concluded that seat back stiffness and "effective seat-back friction" were the most important factors in preventing ramping; that the usefulness of seat back friction was "not very" dependent on the degree of seat back stiffness; and that the use of lap belts was of lesser importance.

However, the study noted that seat back stiffness by itself did not "considerably" improve occupant restraint until it was increased to 300% of the baseline test value. It reported that such a degree of stiffness was "not drastically different from some existing production seats," and that three of the "strongest" seats were found in "small, light, economy cars." It declared that such a degree of stiffness did not represent "the rigid seat that some are wary of."

The study reported that the baseline seat, which was slightly below the average stiffness for seats in "the existing vehicle fleet," had no problem satisfying Standard 207's requirement of resisting torque of 3300 inch-pounds at the seating reference point. However, a rear impact at thirty miles per hour "pushes the baseline seat near its maximum sustainable" torque at the seat back's hinge of about 11,500 inch-pounds, with the result that the seat back "sustains deflections of 55 or more, and reaches the limit of its ability to sustain load" before buckling and plastic deformation cause it to collapse. Because the force generated by a rear impact at thirty miles per hour was "much higher" than a static force of 3300 inch-pounds, a seat back's ability to resist the latter "may not be a realistic measure of how the seat will perform under crash conditions."

Plaintiff also introduced the owner's manual for plaintiff's vehicle into evidence. It contained a warning not to recline the seats too far: "Do not ride with the seat back reclined so that the shoulder belt is no longer resting against your chest. In a collision you could slide under the seat belt and be seriously or fatally injured. Use the recliner only when the vehicle is parked."

Motions for judgment, whether made under Rule 4:37-2(b) at the close of the plaintiff's case, under Rule 4:40-1 at the close of evidence, or under Rule 4:40-2(b) after the verdict, are "governed by the same evidential standard: '[I]f, accepting as true all the evidence which supports the position of the party defending against the motion and according him the benefit of all inferences which can reasonably and legitimately be deduced therefrom, reasonable minds could differ, the motion must be denied. . . .'" Verdicchio v. Ricca, 179 N.J. 1, 30 (2004) (citations and quotations omitted). This is the same standard which applies to trial courts, Frugis v. Bracigliano, 177 N.J. 250, 269 (2003), and which governs a motion for summary judgment. Schneider v. Simonini, 163 N.J. 336, 360 (2000); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995).

This court will review the findings de novo, using the same standard applied in the trial court. See Turner v. Wong, 363 N.J. Super. 186, 198-99 (App. Div. 2003) (appellate courts review grants of summary judgment de novo under standard that applied at trial).

The Consumer Fraud Act, N.J.S.A. 56:8-1 to -135, (CFA) prohibits material misrepresentations or omissions that are intended to induce reliance:

The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice . . . .

[N.J.S.A. 56:8-2.]

Private individuals must show an "ascertainable loss" from conduct within the statutory prohibition:

Any person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act, or practice declared unlawful under this act or the act hereby amended and supplemented may bring an action or assert a counterclaim therefor in any court of competent jurisdiction. . . .

[N.J.S.A. 56:8-19.]

All successful actions result in an award of "threefold the damages sustained" in addition to any other appropriate legal or equitable relief. Ibid.; Weinberg v. Sprint Corp., 173 N.J. 233, 248-49 (2002); Skeer v. EMK Motors, Inc., 187 N.J. Super. 465, 470-71 (App. Div. 1982).

When the CFA violation is an "affirmative act," plaintiffs do not have to show that the defendant had knowledge of the capacity to mislead or that the defendant had an intent to do so. Cox v. Sears Roebuck & Co., 138 N.J. 2, 17-18 (1994); Leon v. Rite Aid Corp., 340 N.J. Super. 462, 468-69 (App. Div. 2001). However, when the violation is an omission, as plaintiff alleged here, "the plaintiff must show that the defendant acted with knowledge, and intent is an essential element of the fraud." Cox, supra, 138 N.J. at 18. Accord Fenwick v. Kay Am. Jeep, Inc., 72 N.J. 372, 377 (1977) (knowledge and intent must be shown when alleged CFA violation is concealment, suppression, or omission of material fact). We, therefore, reject plaintiff's argument that a CFA claim requires only knowledge of a product defect.

Private plaintiffs who can show an "ascertainable loss" from prohibited conduct do not have to prove reliance, although they must show a causal relationship between the conduct and the loss, Judge v. Blackfin Yacht Corp., 357 N.J. Super. 418, 425 (App. Div.), certif. denied, 176 N.J. 428 (2003); Carroll v. Cellco P'ship, 313 N.J. Super. 488, 502 (App. Div. 1998), such as a representation or omission that had the capacity to mislead the average consumer. Leon, supra, 340 N.J. Super. at 468-69. It is the absence of a reliance requirement that distinguishes a CFA cause of action from a fraud claim. N.J. Citizen Action v. Schering-Plough Corp., 367 N.J. Super. 8, 15 (App. Div.), certif. denied, 178 N.J. 249 (2003); Varacallo v. Mass. Mut. Life Ins. Co., 332 N.J. Super. 31, 43 (App. Div. 2000).

The Supreme Court has explained that the ascertainable loss, while not limited to monetary losses, "still must be objectively ascertained and is not defined by the subjective wants of plaintiffs." Thiedemann v. Mercedes-Benz USA, 183 N.J. 234, 244 (2005). It may be a loss that will occur in the future, such as a decrease in an automobile's resale value due to a known and persistent defect, but it must be susceptible of estimation to a reasonable degree of certainty, and a plaintiff must provide such an estimate in order to defeat a motion for summary judgment. Id. at 248-49. The cost of medical services to treat injuries arising from conduct prohibited by the CFA qualifies as an ascertainable loss. Castro v. NYT Television, 370 N.J. Super. 282, 295 (App. Div. 2004); Jones v. Sportelli, 166 N.J. Super. 383, 391-92 (Law Div. 1979).

Judge Koenig correctly found as a matter of law that plaintiff failed to show that Chrysler intended its silence about seat backs to mislead consumers, as Cox, Fenwick, and Leon require for the knowledge and intent elements of a CFA claim based on an omission. The jury verdict for plaintiff on her product liability claim established that the performance limits of the seat back in rear impacts represented a product defect and that the risk of injury from a defect of that kind was reasonably foreseeable, but it did not necessarily establish that defendant actually recognized and understood at the time that such a level of performance was poor enough to qualify as a defect. Coffman v. Keene Corp., 133 N.J. 581, 593-94 (1993) (strict product liability requires only product defect or failure to warn, and injury to a reasonably foreseeable user).

The sole support for inferences that defendant understood the seat backs to be defective, and intentionally withheld that recognition from consumers, was the 1996 University of Virginia study in which the performance of some production car seats showed that it was feasible to provide the degrees of stiffness and friction to afford significant protection from ramping in rear impacts. That study, however, did not mention the seats in Chrysler minivans, and there was no evidence that defendant had other information which, when combined with that study, would have indicated that the minivan seat back was unable to perform at the level the study considered adequate. The other documents did not support those inferences, as Cantor's own 1992 internal memo for defendant noted the lack of industry or scientific consensus on what type of behavior should be desired for seat backs in rear impacts; the 1992 NHTSA study failed to show that seats which were damaged in rear impacts caused more injury than seats which did not; and the undated and untitled study seems considerably older, judging by its use of references no later than 1967.

Cantor's testimony added nothing to those documents, as it only repeated the observation that the seats in some vehicles were known to perform better than those in others. Even if the "60 Minutes" segment and Sheridan's testimony had been admitted, they said nothing about the performance of the seat backs in minivans that Chrysler sold in 1997. They also lacked any indication that Chrysler understood the performance of those seat backs to be inadequate, other than Sheridan's unelaborated suspicions of what he considered to be Chrysler's furtive treatment of the subject during the period between the segment's broadcast and his December 1994 termination, which was three years before plaintiff purchased her vehicle. In short, plaintiff provided no evidential support that Chrysler knew of the defect and intentionally withheld that information from consumers.

Therefore, we concur with the analysis of the trial judge that the record as a matter of law lacked support for the elements of a CFA claim, and accordingly reject this claim.

Turning to the post-trial motions, we initially consider plaintiff's contention that the trial judge improperly calculated the remittitur required to conform to the collateral source rule. Following receipt of the verdict on the products liability claim, Chrysler moved for remittitur of the damage award for future medical expenses equal to the amounts that would be covered by collateral sources such as insurance. Plaintiff argued that any remittitur should be offset not only by premiums paid for the collateral sources but also by the deductibles and co-payments required by the collateral coverage. Judge Koenig held that the offset was limited to payments required to receive the medical benefits from a collateral source and that plaintiff had failed to show that deductibles and co-payments were payments incurred to obtain the coverage. We agree and affirm this ruling.

The collateral source rule has been codified at N.J.S.A. 2A:15-97; it provides:

In any civil action brought for personal injury or death . . . if a plaintiff receives or is entitled to receive benefits for the injuries allegedly incurred from any other source other than a joint tortfeasor, the benefits, other than workers' compensation benefits or the proceeds from a life insurance policy, shall be disclosed to the court and the amount thereof which duplicates any benefit contained in the award shall be deducted from any award recovered by the plaintiff, less any premium paid to an insurer directly by the plaintiff or by any member of the plaintiff's family on behalf of the plaintiff for the policy period during which the benefits are payable. Any party to the action shall be permitted to introduce evidence regarding any of the matters described in this act.

[N.J.S.A. 2A:15-97.]

The statute was enacted to address collateral payments under insurance policies, employment contracts, pensions, and social or labor welfare statutes, Kiss v. Jacobs, 138 N.J. 278, 282-83 (1994), in order "to disallow double recovery to plaintiffs. . . ." O'Brien v. Two W. Hanover Co., 350 N.J. Super. 441, 445 (App. Div. 2002). The only collateral source payments that are excluded are workers' compensation benefits and proceeds from a life insurance policy. The statute also does not distinguish between payments from a collateral source for past damages and payments from a collateral source for future damages. See Parker v. Esposito, 291 N.J. Super. 560, 567 (App. Div.) (applying the statute to collateral source payments for future medical expenses), certif. denied, 146 N.J. 566 (1966); Thomas v. Toys "R" Us, Inc., 282 N.J. Super. 569, 583-88 (App. Div.) (applying statute to collateral source payments for past medical expenses and past lost wages), certif. denied, 142 N.J. 574 (1995).

The statute does not address deductibles or co-payments. We have found no authority that equates deductibles or co-payments with premiums. We also have found no authority that endorses the distinction, although one case implicitly does so. See Thomas, supra, 282 N.J. Super. at 586-87 (upholding trial court's use of "the 80% copayment factor in determining [the] plaintiff's medical benefits" from collateral sources). Nevertheless, we hold that the purpose of the collateral source rule would not be advanced by treating deductibles and co-payments as the equivalent of a premium.

An insurance contract describes and defines the benefit to be received in return for the premium paid. Typically, the contract defines the services that are covered and the amount that will be paid for the service or the percentage of the costs of the service that will be paid It also describes the deductible and co-payments applicable to the policy. The cost for medical services that fall within the deductible or require a co-payment are not benefits under the contract because the insurer has no obligation under the contract to pay for those medical services. As such the deductibles and co-payments are not analogous to premiums. Cf. Roig v. Kelsey, 135 N.J. 500, 509-10, 514-15 (1994) (Legislature did not intend to treat deductibles and co-payments for medical expenses under no-fault auto insurance policy's personal injury protection as uncompensated economic losses for which insureds could pursue at-fault drivers). Therefore, we affirm the damage award as remitted.

In response to a motion by Chrysler, the judge suspended prejudgment interest for the period between the dismissal of her complaint for failure to comply with discovery and its reinstatement, a period of approximately ten weeks. He reasoned that it was appropriate to do so because plaintiff "wasn't performing her responsibilities as plaintiff." She contends that any defalcation by her or her prior attorney does not rise to the Rule 4:42-11(b) "exceptional case" standard.

Rule 4:42-11(b) mandates awards of prejudgment interest in tort cases except where prohibited by statute. The interest is to be calculated "from the date of the institution of the action or from a date 6 months after the date the cause of action arises, whichever is later . . . ." A court may "suspend the running of" prejudgment interest "in exceptional cases." Ibid. However, this authority should "be most cautiously exercised, and always with consideration of the underlying purpose and philosophy of the rule," which is that "prejudgment interest is not a penalty but is rather a payment for the use of money" that was "rightfully the plaintiff's" as of the accrual of the cause of action on which the plaintiff prevailed. Pressler, Current N.J. Court Rules, comment 8 on R. 4:42-11 (2005).

It is well-settled that "the awarding of prejudgment interest is subject to the trial judge's broad discretion in accordance with principles of equity," and that the court's decision merits appellate deference "unless it represents a manifest denial of justice." Musto v. Vidas, 333 N.J. Super. 52, 74 (App. Div.), certif. denied, 165 N.J. 607 (2000). However, the discretion to suspend prejudgment interest "is to be guided essentially by the . . . policies which gave birth to the Rule," which are the encouragement of early settlement and fair compensation for the use of the sums that the defendant owed to the plaintiff once the cause of action accrued. Kotzian v. Barr, 81 N.J. 360, 362-64 (1979).

In Allen v. Heritage Court Associates, 325 N.J. Super. 112, 117 (App. Div. 1999), we provided an analysis applicable here because it equated the dismissal of a complaint for failure to seek timely confirmation of an arbitration award with the entry of a default judgment against a party for violating the Rules. The plaintiff in Allen won an arbitration award, and after the running of the period when either party could have demanded a trial de novo, the defendant offered to settle for the amount of the award. Id. at 115. The plaintiff rejected the offer and demanded a larger sum, but neither party made a timely motion to confirm the award and enter judgment, so the court dismissed the case. Ibid. The defendant thereafter withdrew its offer to settle for the amount of the award. Ibid. The plaintiff then sought to reinstate the complaint on the basis that the only reason she delayed making any kind of motion was to accommodate the settlement negotiations. Id. at 115-16. The court denied reinstatement on the ground that the negotiations did not represent the "extraordinary circumstance" needed for reinstatement. Id. at 116.

Treating the motion to reinstate as a motion pursuant to Rule 4:50-1, this court held that the post-arbitration settlement discussions, together with the plaintiff's promptness in seeking reinstatement after the defendant ended the negotiations by withdrawing its settlement offer, constituted "an adequate showing of 'excusable neglect' to warrant relief under Rule 4:50-1(a)" and compelled both reinstatement of the complaint and confirmation of the award. Id. at 119-20. Nonetheless, this court also saw a need to impose some consequence on the plaintiff's failure to make a timely motion to confirm, in order to discourage litigants "from adopting a cavalier attitude towards" the rule's time limit. Id. at 121. For that reason, it suspended prejudgment interest on the award from the expiration of the time period for seeking confirmation and the date of its opinion, citing Rule 4:42-11(b) as authority to suspend prejudgment interest in "exceptional cases." Ibid.

To be sure, the suspension of prejudgment interest for the period that the complaint was dismissed for discovery violations may be considered a double penalty. See R. 4:23-5 (requiring payment of a fee prior to reinstatement of dismissed complaint). Nevertheless, the matter of the suspension of prejudgment interest is vested in the broad discretion of the trial judge who must craft an appropriate remedy to a variety of situations. In this case, we discern no mistaken exercise of that discretion, particularly when the complaint has been dismissed for failure to discharge plaintiff's obligation as a litigant.

Finally, Judge Koenig denied prejudgment interest on the future economic loss portion of the jury award. In doing so, he applied Rule 4:42-11(b) as amended effective July 1, 2003. Plaintiff concedes the rule plainly prohibits prejudgment interest on awards for future economic loss. She argues, however, that it should not be applied to complaints filed before the effective date of the amendment. We disagree.

Our resolution of this issue is assisted by Busik v. Levine, 63 N.J. 351 (1973), which addresses the original version of Rule 4:42-11. In Busik, the Court related that the original version of Rule 4:42-11 was adopted after the accrual of the causes of action in that case, but that the trial began after the effective date of the rule. It also related that the provisions in New Jersey law "dealing with" interest on judgments are not statutory, but rather "have always been and remain judge-made." Id. at 356. The question in Busik relevant to this case was whether the newly-adopted rule on awarding prejudgment interest should be applied to causes of action that predated it. Id. at 360. The Court saw "no reason not to apply the usual rule that judge-made law is retrospective." Id. at 360-61. It further observed that the provision of prejudgment interest was remedial, and that courts in states which provided for it by statute recognized it as remedial in purpose and called for retroactive application "notwithstanding the usual rule that statutes operate prospectively." Id. at 361.

While the adoption of a provision permitting awards of prejudgment interest was remedial for plaintiffs, the recent elimination of prejudgment interest on claims for future economic loss was remedial for defendants. Nothing in Busik suggests that a new legal provision may be considered "remedial" only if it benefits plaintiffs. On the contrary, a rule or statute is remedial if it "has for its purpose the promotion of justice" and if it was "designed to correct imperfections in prior law by generally giving relief to the aggrieved party," with no suggestion that only plaintiffs may ever be so aggrieved. Hart v. Fox, 204 N.J. Super. 564, 571 (Law Div. 1985). Plaintiff does not provide any authority for her argument that remedial provisions have been applied retroactively only to benefit plaintiffs, but rather relies on the happenstance that prior amendments to Rule 4:42-11, which were applied retroactively, tended to benefit plaintiffs rather than defendants. We consider Busik to require the retroactive application of all the provisions of Rule 4:42-11 in effect at the time judgment is entered, as the court did here.

In sum, we affirm the dismissal of the consumer fraud claim. We also affirm the orders remitting the judgment to conform to the collateral source rule that included a ruling that co-payments and deductibles should be treated as insurance premiums, suspending prejudgment interest for the period in which plaintiff's complaint had been dismissed for discovery violations, and denying prejudgment interest on future economic losses.

Affirmed.

 

Gravitational force.

"Ramping" is the term for the sliding of the vehicle occupant upward along the seat back after a rear impact, sometimes beyond the top of the seat back or head restraint.

Defendant was created in 1998 by the merger of Chrysler with DaimlerBenz. Gen. Motors Corp. v. Linden, 22 N.J. Tax 95, 111 (Tax 2005).

One kilogram equals 0.454 pounds, so for a seat weighing N pounds, 9.8 times its weight in kilograms would be 0.454 times N times 9.8 = 4.44 times N pounds.

(continued)

(continued)

33

A-4787-03T1

April 11, 2006